PERTH (miningweekly.com) – Lithium miner Pilbara Minerals has secured A$15-million to fund improvement works at its Pilgangoora operations, in Western Australia, to support increased Stage 1 production.

The miner on Monday told shareholders that it had reached an agreement with offtake partner Yibin Tianyi Lithium Industry Co to provide a $15-million unsecured prepayment to Pilbara Minerals, contributing to the A$22-million of improvement works under way at the Pilgangoora operation.

The company earlier this year highlighted plans to execute a series of process plant improvement works on its current Stage 1 Pilgangoora processing plant. These process plant improvements are expected to unlock an additional 10% to 15%, or between 30 000 t/y and 50 000 t/y of production capacity, at a capital cost of some A$22-million. Commissioning of this expanded work is expected in the September quarter of this year.

The prepayment from Yibin Tianyi will be in support of additional offtake of up to a further 40 000 t/y of spodumene concentrate from the increased production capacity at Pilgangoora.

This increased offtake will be incorporated into the existing 75 000 t/y, five year offtake agreement already in place with Yibin Tianyi. Following the commissioning of the Stage 1 improvement works, the offtake agreement would now increase to 115 000 t/y of spodumene concentrate.

“Our relationship continues to grow with Yibin Tianyi as we work together in support of both our growth ambitions. For Yibin Tianyi, to become one of the biggest lithium chemical suppliers in China with the support of our major shareholder CATL, and for us to become one of the largest, lowest cost lithium raw materials suppliers in the world,” said Pilbara Minerals MD and CEO Ken Brinsden.

The Stage 1 improvement works are scheduled to start on site this month, with the company having awarded a A$15-million contract for the execution of these works to a joint venture between SIMPEC and IronMerge.